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The three oil marketing companies (OMCs) - Indian Oil, Bharat Petroleum Corporation and Hindustan Petroleum Corporation - cut the prices of non-subsidised cooking gas by Rs 113 a cylinder and aviation turbine fuel (ATF) by 4.1 per cent on Monday. The price relief follows a 21 per cent reduction in OMCs' under-recoveries on subsidised sales of liquefied petroleum gas (LPG) and kerosene in the pricing fortnight that began on Monday.
After Monday's price reduction, a 14.2-kg non-subsidised LPG cylinder, which is consumed after the exhaustion of 12 subsidised cylinders, will cost Rs 752 in Delhi compared to the earlier price of Rs 865. This is the fifth straight reduction in the rates of non-subsidised LPG since August.
The price of ATF or jet fuel at Delhi has been cut by Rs 2,594.93 a kilolitre to Rs 59,943 a kilolitre - the fifth straight monthly reduction in rates. Earlier, ATF prices had been slashed by 7.3 per cent on November 1. After Monday's cut, ATF prices have dropped below Rs 60,000 a kilolitre for the first time in three years.
Brent, the benchmark grade for more than half of the world's oil, has dropped to a five-year low of $68 a barrel, owing to a demand slump in key consuming nations at the back of sustained high levels of production. Despite the rout in crude prices globally, the Organization of the Petroleum Exporting Countries (OPEC) had indicated last week that it would stick to a production level of 30 million barrels a day. The OMCs had on Sunday cut petrol by 91 paise a litre, the seventh reduction in price since August, and diesel by 84 paise a litre, the third reduction within a month. Petrol is now priced at Rs 63.3 a litre, while diesel price has come down to Rs 52.5 a litre.
The petroleum ministry on Monday said OMCs' losses on sale of subsidised LPG and kerosene have dropped 21 per cent to Rs 148 crore a day as international oil rates hit a five-year low.
"OMCs, effective December 1, 2014, are now incurring a combined daily under-recovery of Rs 148 crore on the sale of PDS (public distribution system) kerosene and domestic LPG. This is lower than Rs 188 crore daily under-recoveries during the previous month," the ministry said in a statement.
The three state-run OMCs are currently losing Rs 25.69 on sale of every litre of kerosene and Rs 279.91 on every 14.2-kg domestic cooking gas cylinder.
OMCs' gross under-recoveries stood at Rs 139,000 in FY14 and Rs 51,000 crore in the first half of the current financial year. While the government had freed petrol prices in June 2010, diesel was de-controlled in October this year.
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